Why is life insurance important? No one ever plans for an unforeseen accident; that's why they're unforeseen. However, without the right plan in place, your family could continue to suffer long after losing a family member.
Life insurance can pay your mortgage.
One of the most important reasons to carry life insurance is if you have a mortgage on your home. Many mortgage companies actually partner with life insurance companies for this very reason. If you have a mortgage, and you or your spouse has an unforeseen accident, you lose that source of income. Without the extra income, many people must foreclose on their homes. A life insurance policy can help you continue to make the payments, or pay off the home entirely, giving you one less thing to worry about.
Funeral expenses mount quickly.
It's not something most people like to think about, but funeral expenses can mount quickly. Even the most basic burial costs thousands of dollars, and if you want to do something special for your loved one, it's all too easy to break the bank. A life insurance policy can help you defray the costs of funeral expenses and give your beloved family member the burial you feel they deserve, without having to worry about the price tag.
The right policy gives your family breathing room.
The last thing you want to worry about when you've lost a family member is how you're going to keep food on the table. The general rule of thumb for life insurance is to carry a policy that equals roughly three times your annual income. If you have that assurance, you can take a little breathing room to mourn your loved one and focus on taking care of your family before you have to stress about how to pay the bills or handle the financial repercussions of an unexpected death.
Leave a legacy for your family members.
Want to send your kids to college? Give them a down payment for a house someday, when they're ready to buy? A life insurance policy can help you provide for those scenarios even if you're not around to handle it personally. Even if a family member passes when children are young, a life insurance policy can help plan for those eventualities.
Life insurance offers flexible cash options.
Most life insurance policies aren't just useful after death. Many life insurance policies enable you to borrow money from the policy and later repay it, or cash in the policy before death for a smaller amount. If your financial needs are great enough, it might be worthwhile to look into cashing in your life insurance policy. Keep in mind that you won't get the full policy amount if you cash it in; what you'll receive varies depending on your age, how long you've held the policy and how much money you've paid into it.
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